# Table 10: First-Differenced Local Projections (OECD)

Level variables show y_{t+h} - y_{t-1} (cumulative change from pre-shock).
Growth variables show cumulative sum from t to t+h.
Pre-trend test: h<0 coefficients should be null.

## Summary

| Outcome | h=-3 | h=-2 | h=-1 | h=0 | h=1 | h=2 | h=3 | h=4 | h=5 |
|---------|------|------|------|-----|-----|-----|-----|-----|-----|
| Δ Investment/GDP | 0.2807 | 0.1670 |  | 0.0372 | 0.6751** | 1.3404*** | 1.1571*** | 0.8222** | 0.6016 |
| Δ MPK | 0.0016* | 0.0013*** |  | -0.0011** | 0.0006 | 0.0006 | -0.0014 | -0.0041*** | -0.0039*** |
| Cumul. Δlog K/L | -0.0019 | -0.0006 | -0.0010 | 0.0064*** | -0.0060* | -0.0157*** | -0.0138*** | -0.0078* | -0.0082 |
| Cumul. GDP Growth | -2.6736*** | -2.3669*** | -1.4518*** | -1.2573*** | 0.4642 | 1.7783** | 1.8344** | 0.0104 | 0.3055 |
| Cumul. Δlog TFP | -0.0294*** | -0.0183*** | -0.0128*** | -0.0057** | -0.0049 | 0.0091 | 0.0035 | 0.0014 | 0.0024 |
| Placebo → Δ Invest | -0.2543 | -0.1940** |  | 0.1795** | 0.3015* | 0.0809 | 0.0312 | -0.1556 | -0.4749 |

## IRF Plots

```
Δ Investment/GDP (first-diff): Demo Inflows (OECD)
==================================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3       0.28067  0.26026 0.2812    703   -------------·-------------                                
 -2       0.16704  0.13740 0.2245    703      -------·-------                                         
 -1           n/a
  0       0.03716  0.15876 0.8150    703  --------·--------                                           
  1     0.67510**  0.28260 0.0172    703         |  --------------*--------------                     
  2    1.34039***  0.34549 0.0001    703         |                -----------------*------------------
  3    1.15710***  0.38725 0.0029    703         |         -------------------*--------------------   
  4     0.82216**  0.41305 0.0469    703         ---------------------*---------------------          
  5       0.60161  0.41448 0.1471    703   ---------------------·---------------------                
                                          ------------------------------------------------------------
        -0.2740                                            2.0175
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

Δ MPK (first-diff): Demo Inflows (OECD)
=======================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3      0.00163*  0.00092 0.0752    703                                        ----------o-----------
 -2    0.00134***  0.00048 0.0051    703                                         | ------*-----       
 -1           n/a
  0    -0.00112**  0.00048 0.0205    703                             ------*-----|                    
  1       0.00063  0.00099 0.5237    666                                  -----------·-----------     
  2       0.00056  0.00125 0.6537    629                              --------------·--------------   
  3      -0.00141  0.00141 0.3151    592                 ----------------·----------------            
  4   -0.00413***  0.00144 0.0042    555  ----------------*----------------      |                    
  5   -0.00394***  0.00144 0.0065    518  -----------------*----------------     |                    
                                          ------------------------------------------------------------
        -0.0069                                            0.0034
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

Cumul. Δlog K/L: Demo Inflows (OECD)
====================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3      -0.00195  0.00397 0.6235    703                         --------------·-------------         
 -2      -0.00058  0.00336 0.8631    703                              -----------·------------        
 -1      -0.00101  0.00203 0.6189    703                                  ------·-------              
  0    0.00636***  0.00214 0.0030    703                                          |   -------*--------
  1     -0.00596*  0.00337 0.0769    666                    ------------o-----------                  
  2   -0.01566***  0.00397 0.0001    629  -------------*--------------            |                   
  3   -0.01382***  0.00434 0.0015    592   ---------------*---------------        |                   
  4     -0.00775*  0.00465 0.0959    555             ----------------o----------------                
  5      -0.00817  0.00497 0.1011    518           -----------------·-----------------                
                                          ------------------------------------------------------------
        -0.0234                                            0.0105
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

Cumul. GDP Growth: Demo Inflows (OECD)
======================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3   -2.67360***  0.66953 0.0001    703  ----------*-----------          |                           
 -2   -2.36687***  0.54632 0.0000    703      ---------*--------          |                           
 -1   -1.45182***  0.29133 0.0000    703                 -----*-----      |                           
  0   -1.25728***  0.30303 0.0000    703                   -----*----     |                           
  1       0.46419  0.60236 0.4412    703                            ----------·---------              
  2     1.77830**  0.71798 0.0135    703                                  |  -----------*------------ 
  3     1.83443**  0.75098 0.0148    703                                  |  ------------*------------
  4       0.01042  0.80171 0.9896    703                     -------------·-------------              
  5       0.30547  0.81055 0.7064    703                       -------------·-------------            
                                          ------------------------------------------------------------
        -3.9859                                            3.3064
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

Cumul. Δlog TFP: Demo Inflows (OECD)
====================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3   -0.02937***  0.00653 0.0000    703  -----------*------------               |                    
 -2   -0.01826***  0.00520 0.0005    703              ----------*---------       |                    
 -1   -0.01278***  0.00265 0.0000    703                        -----*-----      |                    
  0    -0.00574**  0.00250 0.0218    703                               ----*-----|                    
  1      -0.00495  0.00493 0.3161    666                           ---------·---------                
  2       0.00914  0.00628 0.1460    629                                      -----------·------------
  3       0.00352  0.00725 0.6277    592                               -------------·-------------    
  4       0.00139  0.00779 0.8584    555                            --------------·--------------     
  5       0.00244  0.00765 0.7504    518                             --------------·--------------    
                                          ------------------------------------------------------------
        -0.0422                                            0.0214
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

DEMOGRAPHIC → Δ Investment/GDP (OECD)
=====================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3       0.28067  0.26026 0.2812    703   -------------·-------------                                
 -2       0.16704  0.13740 0.2245    703      -------·-------                                         
 -1           n/a
  0       0.03716  0.15876 0.8150    703  --------·--------                                           
  1     0.67510**  0.28260 0.0172    703         |  --------------*--------------                     
  2    1.34039***  0.34549 0.0001    703         |                -----------------*------------------
  3    1.15710***  0.38725 0.0029    703         |         -------------------*--------------------   
  4     0.82216**  0.41305 0.0469    703         ---------------------*---------------------          
  5       0.60161  0.41448 0.1471    703   ---------------------·---------------------                
                                          ------------------------------------------------------------
        -0.2740                                            2.0175
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

PLACEBO (gravity-only) → Δ Investment/GDP (OECD)
================================================

  h          coef       SE      p      N  Plot
  -          ----       --    ---    ---  ------------------------------------------------------------
 -3      -0.25432  0.15982 0.1120    703                     ----------·----------                    
 -2    -0.19402**  0.07935 0.0147    703                            -----*-----|                      
 -1           n/a
  0     0.17948**  0.09109 0.0492    703                                       ------*------          
  1      0.30152*  0.17599 0.0871    703                                      -----------o------------
  2       0.08088  0.24190 0.7382    703                          ----------------·----------------   
  3       0.03120  0.30017 0.9172    703                     -------------------·-------------------- 
  4      -0.15563  0.32366 0.6308    703             ---------------------·---------------------      
  5      -0.47490  0.34651 0.1710    703  ----------------------·----------------------               
                                          ------------------------------------------------------------
        -1.1541                                            0.6465
  (* p<0.05, o p<0.1, · p>0.1, | = zero)

```

*p<0.1, **p<0.05, ***p<0.01. OECD subsample. PanelGLS with AR(1).*
